What is the current state of the subleasing space and what should you expect going into 2023?
Hosts Bill Condon and Matt McGregor share some intriguing stats on the subleasing space, how Amazon's subleasing move impacted the markets, and what to expect from the space in the future.
- What's going on in the subleasing space? Bill and Matt start the conversation by sharing some really interesting stats on the current and future state of the subleasing market.
- In the 4th quarter of 2021, there were 10.2 million feet advertised for subleasing in the US. That number has increased by 78% in 2022 with 45 million square feet available for sublease.
- Bill explains how the online shopping slowdown is forcing Amazon to sublease warehouses.
- With more subleasing space available countrywide, Bill and Matt try to uncover whether rent prices will change and the demand for warehouses will slow down in 2023.
- One of the major advantages of subleasing is that you're getting yesterday's rates. In a ten-year lease, for example, if you sublease five years into the contract, you'll be paying rates from 5 years ago.
- However, the biggest drawback of subleasing is the risk that you won't get a renewal option or you'll get hammered with renewal prices.
- Matt and Bill are convinced the increase in subleasing space won't affect rent prices in primary markets like New Jersey, where we're seeing very good leasing velocities.
- Bill feels the upward trend in the subleasing space will level off in 2023.
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Industrial Advisors
